As part of a revised agreement in 1994, the band sub–leased the casino back from the commission and was required to pay the city rent equaling 19 percent of gross revenue.

But in July of last year the National Indian Gaming Commission issued a "Notice of Violation" to the band, concluding that sub–lease violated the Indian Gaming Regulatory Act which mandates the band retain sole proprietary interest and responsibility for its gaming activity.At that time it directed the Band to "cease performance" under the revised agreement or face closure.

As a result the band stopped paying rent to the city.Now the Department of Interior has sided with the Gaming Commission and determined the 1994 agreement constitutes use of leased premises for an unlawful purpose.

In a letter received Tuesday, March 27, 2012 by commission members Mayor Don Ness and Band Chairwoman Karen Diver the U.S. Department of the Interior gave Ness and Diver ten days too show why the lease should "not" be cancelled.

The letter was written by Larry Echo Hawk the Assistant Secretary of Indian Affairs.

He wrote if the commission does not “cure the violation” within that time, the Interior Department will determine whether the lease should be canceled.

Reacting to this latest development Chairwoman Karen Diver said quote "This is yet another signal from a federal agency that the agreements that created Fond–du–Luth are in violation of federal law and that the Band needs to be the sole beneficiary of its own business."

Mayor Don Ness was unavailable for comment.

Click here to read the full letter from the U.S. Dept. of the Interior.